Following the regulatory postponement, the Corporate Sustainability Reporting Directive (CSRD) will become mandatory for many large companies for the first time in the 2027 financial year. The first report will be published in 2028. At first glance, this seems like a delay. In practice, however, it is a tight timeframe.

Because CSRD is not a reporting project. It is a management project.

 

From sustainability report to balance sheet relevance

The CSRD integrates climate-related risks, transition strategies, and key ESG issues into regular corporate reporting. Among other things, it requires:

– Double materiality analysis
– Disclosure of physical and transitional climate risks
– Scenario analyses
– Integration into management reports and governance structures
– Verifiable, consistent data bases

This means that climate risks are leaving the sustainability department and ending up in the remit of finance, risk, and the executive board.

Physical risks such as flooding, heat, or supply chain disruptions are no longer theoretical scenarios. Insurance premiums are rising, coverage is being restricted, and credit terms are changing. Transitional risks—CO₂ pricing, regulation, technological change—can devalue assets and overturn investment decisions.

In future, all of this must be recorded, evaluated, and disclosed in a structured manner.

 

Why 2026 is the operational year

Those who have to report in 2027 cannot start in 2027.

Reliable data collection, especially for Scope 3 emissions, takes time. IT systems must be adapted, internal control mechanisms established, responsibilities defined, and auditors involved at an early stage. Scenario analyses must be integrated into budgeting and investment processes.

Experience from previous waves of regulation shows that companies that start too late produce formal compliance without strategic substance—or expensive retrofits under time pressure.

CSRD does not require cosmetic metrics, but rather consistent, verifiable information. This means processes, not presentations.

 

Are CFOs prepared?

Many companies have established ESG teams. However, there is a gap between reporting and integration. The decisive factor is whether climate risks are already being taken into account in the following areas:

– Investment calculations and discounted cash flow models
– Location decisions
– Insurance and financing costs
– Risk management and internal control systems
– Executive board and supervisory board reporting

If climate risks are reported but not taken into account in capital allocation, implementation remains superficial.

 

Conclusio

The regulatory postponement of the CSRD does not delay economic reality. Climate risks are already affecting cash flows, valuations, and capital costs.

For many companies, 2027 is the first formal reporting year. However, 2026 is the crucial implementation year. CFOs who do not invest in systems, processes, and integration now run the risk of being regulatory compliant but strategically unprepared.

The question is not whether reporting takes place, but whether climate risks have actually been incorporated into financial management.

With its commissioning in November 2023, Al Dhafra Solar PV in Abu Dhabi will be officially connected to the grid.
With 2 gigawatts of installed capacity at a single location, it is considered the largest single-site solar plant in the world.

But size alone is not the whole story. What matters is how the project is progressing—technically, economically, and strategically.

 

The hard facts

Capacity: 2 GW (AC)
Modules: around 4 million bifacial solar modules
Area: approx. 20 square kilometers of desert land
Supply: around 160,000 households
CO₂ savings: approx. 2.4 million tons per year
Tender price: ~1.32 US cents per kWh (world record level at the time of the bid)

Participants include Masdar, TAQA, EDF Renewables, and Jinko Power.

 

How is the project running operationally?

After more than a year of full-capacity operation, three key findings have emerged:

Scaling works—if the conditions are right

Extremely high solar radiation
Low precipitation
Large, contiguous areas
Centralized energy policy

This allows for a maximum full-load hours interpretation compared to Europe. While European solar parks often achieve 1,000–1,200 full-load hours, the potential in Abu Dhabi is significantly higher.

This significantly reduces electricity production costs.

 

Double-sided solar modules Modules pay off

The modules used utilize direct and reflected radiation from the bright desert sand.
This measurably increases yields, especially in arid regions.

Challenge: Dust and sand deposits.
Solution: Automated cleaning and maintenance systems.

The project shows that desert conditions are not a disadvantage—they are predictable.

 

The prize is not a PR stunt

1.32 US cents/kWh was not a theoretical value, but the result of a competitive tender.
This was made possible by:

Very favorable financing costs
Government purchase guarantees
Massive economies of scale
Favorable EPC structures

This is industrial policy strategy, not NGO rhetoric.

 

What does this mean globally?

Al Dhafra is a signal in three directions:

Solar energy is no longer a niche topic.
2 GW corresponds to the scale of conventional large-scale power plants.
Oil-producing countries are seriously diversifying.
The United Arab Emirates is positioning itself as an exporter of green electricity and, in the future, green hydrogen.
Europe is losing momentum.
While approvals are often debated for years in the EU, gigawatt projects are being realized within a few years in the Middle East.

 

Critical assessment

Of course, solar power remains volatile.
Without storage or flexible grid infrastructure, a 2 GW park is not a base load power plant.

The strategic question is therefore:
Will large-scale storage, hydrogen projects, or hybrid power plant solutions follow?

The UAE is already working on this integration.

 

Conclusio

The Al Dhafra solar project is not a symbolic project.
It is industrial proof that utility-scale solar can be cheaper than fossil fuel alternatives—when capital, land, and political clarity come together.

2 gigawatts from the desert is less of an ecological story than an economic one.

And that is precisely why the project is so relevant.

 

Photo: Masdar

While we wait for the first flowers to bloom, nature's actual rebirth begins in secret. Not in meadows or treetops, but in the soil. That is where the stability of ecosystems throughout the year is determined. That is where carbon is bound or released. That is where water is stored or lost. That is where resilience—or erosion—arises.

 

Microorganisms ramp up

As soil temperatures rise, bacteria and fungi become active again. They decompose organic material, release nutrients, and drive the nitrogen and carbon cycles.

This may sound technical, but it is systemically relevant:
The faster organic matter decomposes, the more CO₂ can be released. At the same time, nitrogen that is available to plants is produced, enabling growth. It is a fine line between productivity and emissions.

 

Mycorrhizal networks reactivate themselves

Fine fungal threads connect plant roots underground to form complex networks. These mycorrhizal systems greatly expand the effective root surface area, improve water uptake, and enable nutrient exchange between plants.

In stressful years—drought, heat, nutrient deficiency—these networks are often more crucial than the plant itself. Without functioning soil biology, there can be no stable vegetation.

 

The carbon buffer is now making a decision

Soil is one of the largest terrestrial carbon reservoirs. Whether it acts as a sink or becomes a source depends heavily on moisture, temperature, and biological activity in the spring.

A mild winter without frost can cause microbial processes to continue, resulting in continuous CO₂ emissions.
A winter with little snow also reduces the natural insulation of the soil. Frost penetrates deeper, and the soil structure can be damaged.

These are not academic details. They affect agricultural yields, water retention, and climate dynamics.

 

Earthworms as an indicator of system health

Earthworms are not a footnote. They improve soil structure, increase infiltration, reduce surface runoff, and create stable pore systems. Where they are absent, the risk of erosion and nutrient loss increases.

Intensive soil cultivation, pesticide use, and compaction weaken precisely those organisms that are supposed to generate resilience.

 

Why this is relevant

The public debate focuses on emissions, energy, and industry. Soil often remains a side issue, even though it is a strategic infrastructure.

Without living soil, there can be no food security.
Without humus formation, there can be no stable carbon sequestration.
Without functioning microbiology, there can be no biodiversity.

Spring does not begin with blossoms. It begins with biochemical processes that we cannot see—but should understand.

With spring just around the corner, many garden owners are keen to get their hedges and shrubs back into shape. However, there are clear legal requirements to bear in mind when reaching for the shears. Today, we want to explain to #Beetschwestern which cuts are permitted, when restrictions apply, and when pruning is actually mandatory.

 

When is hedge trimming permitted and when is it prohibited?

Section 39(5) of the Federal Nature Conservation Act stipulates that hedges, bushes, living fences, and other woody plants may not be cut back or radically pruned between March 1 and September 30. The aim of this regulation is to protect breeding birds and other wild animals. Gentle pruning and maintenance cutting are permitted, for example to prevent overgrowth, unless birds are breeding in the woody plants, in which case they must be left undisturbed.

 

PLEASE NOTE: This regulation applies not only to public green spaces, but
also to private properties. The only exceptions are trees in home gardens and
allotments, but even here there are restrictions.

 

More information about the different times for hedge trimming for different species can be found in this #Beetschwestern article:

The right time to prune my shrubs

 

What should be considered when pruning trees?

Trees on private garden plots may generally be pruned or felled throughout the year. However, some experts advise garden owners to check whether their municipality has enacted a tree protection ordinance. This may prohibit the felling of certain trees or at least make it subject to approval. Such ordinances vary considerably from municipality to municipality.

 

ATTENTION: If there are birds or other animals in a tree, for example due to an active
nest, the intervention is not permitted. The Federal Nature Conservation Act clearly states that
the habitats of wild animals may not be destroyed without good reason
. This also applies to pruning that is actually permitted.

 

When does pruning become mandatory?

There are situations in which pruning is not only permitted but even necessary. If a tree or shrub poses a threat to public safety, for example because a hedge is in danger of falling onto the sidewalk after a storm or is growing too far into the street, the prohibitions of the Federal Nature Conservation Act do not apply (Giessen Administrative Court, Ref.: 4 L 438/23). Nevertheless, some experts recommend consulting with the relevant nature conservation authority in advance.

 

 

How tall can hedges grow?

The permissible height of hedges and shrubs is regulated by the respective neighbor law of the federal states, about which the municipal administration can provide information. Not only the height is decisive, but also the distance to the neighboring property. Usually, a height of two meters applies to hedges—measured from the ground—if they are planted at least 50 centimeters from the property line. If the hedge is further away, it may generally grow taller.

If your neighbor's hedge is too high or too close to the boundary, you can demand that they trim it or remove it, in compliance with legal regulations, of course. However, depending on the state, this right to have the hedge trimmed or removed may be excluded after a certain period of time. In North Rhine-Westphalia, for example, the exclusion period is six years, while in Hesse it is only three years. And, of course, you can only ask your neighbor to trim the hedge if you yourself comply with the required height (Koblenz Regional Court, Ref.: 13 S 6/20).

 

Is cherry laurel prohibited?

Cherry laurel is particularly popular as a hedge plant. Cherry laurel is classified as a potentially invasive species by the German Environmental and Nature Conservation Association (BUND). This means it is a species that spreads rapidly and can disrupt native ecosystems.

What to do with invasive plants in the garden?

Unlike in Switzerland, where the plant has been banned since 2024, there is currently no general ban in Germany. Cherry laurel may still be purchased, sold, and planted in private gardens. Restrictions may only arise from local regulations, such as municipal statutes, guidelines for allotment gardens, or club regulations.

Today's climate protection efforts do not primarily suffer from a lack of technology. They suffer from misguided economic incentives. The current system rewards emission avoidance, but it hardly addresses the actual core problem: CO₂ that is already in the atmosphere will remain there for centuries. Traditional emission certificates legitimize emissions without creating a genuine obligation to recover them. This is precisely where so-called clean-up certificates come in, which follow the principle of extended producer responsibility.

 

The idea originates from climate economics, including the Potsdam Institute for Climate Impact Research (PIK), and can be found in a recent study on this topic, among other places. The approach is radically simple: whoever emits emissions also assumes responsibility for their subsequent removal. A certificate is then no longer a permanent right to pollute, but a temporary loan—with an obligation to return it.

Instead of "I am allowed to emit CO₂ today," the logic in the future will be: "I am emitting today and commit to removing this amount from the atmosphere later."

This is a fundamental paradigm shift.

"Linking the right to emit to a take-back obligation would not actually be anything fundamentally new," explains Kai Lessmann, PIK researcher and lead author of the above-mentioned study. "This has long been practiced in parts of the economy—for example, in the return of deposit bottles or old electrical appliances. It is the principle of extended producer responsibility: companies are not only responsible for the quality of their goods, but also for the disposal of their waste. And here we show the potential this principle offers for climate protection."

 

Why this is more economically sound

In the existing EU Emissions Trading System, certificates are traded that effectively represent perpetual emission rights. This creates three structural problems:

There is no built-in mechanism for net zero. Even with perfect reductions, there remains a residual that is not addressed.
Negative emissions are optional and mostly voluntary. Accordingly, they are underfunded.
The costs of long-term climate damage are not included in the price.

Clean-up certificates solve this problem elegantly. They force the market to treat CO₂ removal as an integral part of the value chain. Removal becomes not just a "nice to have," but a mandatory factor of production.

This automatically creates demand for carbon removal, innovation is capitalized, and long-term storage gets a real market price. This is how a functioning market economy works.

 

Extended producer responsibility principle also makes sense for emissions

"Given the potential benefits highlighted in this economic analysis, the EU should seriously consider introducing clean-up certificates," says Ottmar Edenhofer, PIK Director and Chair of the EU Advisory Council on Climate Change (ESABCC), who co-authored the study. "The combination of emission rights and buyback obligations would give the economy important flexibility on the path to climate neutrality. And it would subsequently, after 2050, help finance the net-negative emissions necessary to meet the 1.5-degree limit."

 

Why this is not yet a real system today

Here comes the sobering reality. Currently, clean-up certificates exist only as a research model and as loose private experiments. There is no government-regulated framework, no binding standards, and no integration into large emissions markets.

The biggest obstacles:

Measurability
CO₂ removal is technically complex. Permanence, leakage risks, and additional effects cannot be easily measured.
Lack of accountability
No one currently bears systemic responsibility if stored CO₂ escapes again in 30 years.
No regulatory framework
As long as governments do not integrate this into mandatory trading systems, everything will remain in pilot status.

And to be clear: most of the current "removal credits" on the market are of inconsistent quality and, in some cases, hardly reliable. This is a scaling problem, not a marketing problem.

 

What would need to happen for this to work

If clean-up certificates are to be more than just academic concepts, three things are needed:

Strict MRV standards
Measurement, reporting, and verification must be organized at the infrastructure level—not on a project-by-project basis.
Integration into existing markets
No parallel market. This must be built directly into ETS systems, otherwise there will be no demand base.
Long-term chains of responsibility
Issuers must be liable for the permanence of removal, not just for the initial purchase of the certificate.

Without these points, the whole thing remains a well-intentioned mechanism with no systemic effect.

 

Our pro.earth.conclusion:

Clean-up certificates are not a climate protection gimmick. They are a serious attempt to finally price externalities correctly. The concept is economically sound, technologically compatible, and politically feasible. But as things stand today, the idea exists. Models exist. There are small-scale experiments. What is missing is implementation at the system level. As long as countries are not prepared to link emission rights to a buy-back obligation, the market will remain asymmetrical – and net zero will remain a mathematical model rather than a reality.

 

Link

Original publication:
Lessmann, K., Gruner, F., Kalkuhl, M., Edenhofer, O., (2026): Emissions trading with clean-up certificates: How carbon debt can increase climate ambition levels. – Journal of Environmental Economics and Management. [DOI: 10.1016/j.jeem.2026.103307]
https://www.sciencedirect.com/science/article/pii/S0095069626000276